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Cigna Finance

To champion affordable, predictable healthcare while transforming the system for greater simplicity and stakeholder value

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To champion affordable, predictable healthcare while transforming the system for greater simplicity and stakeholder value

Strengths

  • SCALE: Evernorth Health Services provides scale advantages in pharmacy and benefits
  • DIVERSITY: Revenue diversification across pharmacy, benefits, and care services
  • CASH: Strong cash flow generation with $7.3B operating cash in 2023
  • INTEGRATION: Vertically integrated model connecting various healthcare touchpoints
  • TALENT: Experienced leadership team with healthcare industry expertise

Weaknesses

  • TECH: Legacy technology systems requiring ongoing modernization investment
  • COSTS: Rising medical cost trends putting pressure on Medicare Advantage margins
  • COMPLEXITY: Complex organizational structure following multiple acquisitions
  • COMPETITION: Increasing competition in pharmacy benefits management space
  • REGULATION: Vulnerability to changing healthcare regulations and policies

Opportunities

  • EXPANSION: Growth in value-based care arrangements and provider enablement
  • ANALYTICS: Leveraging data analytics to improve health outcomes and costs
  • VIRTUAL: Expansion of virtual care and digital health solutions post-pandemic
  • SPECIALTY: Growing specialty pharmacy market projected at 9% CAGR through 2026
  • GLOBAL: International market expansion leveraging existing capabilities

Threats

  • POLICY: Healthcare policy changes affecting pricing and coverage requirements
  • DISRUPTION: New entrants and tech disruptors in healthcare services space
  • PRICING: Pharmaceutical pricing pressures from regulatory and market forces
  • CYBER: Increasing cybersecurity threats and data privacy concerns
  • ECONOMIC: Economic uncertainty potentially impacting employer-sponsored plans

Key Priorities

  • DATA: Leverage data analytics across business units to drive value
  • INTEGRATION: Accelerate integration of services for seamless customer experience
  • INNOVATION: Invest in technology modernization and digital transformation
  • COST: Implement proactive strategies for managing medical cost trends
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To champion affordable, predictable healthcare while transforming the system for greater simplicity and stakeholder value

DATA MASTERY

Become healthcare's premier data-driven finance organization

  • PLATFORM: Launch unified financial data platform integrating all business units with 99.9% data accuracy
  • ANALYTICS: Implement advanced predictive analytics for medical cost trends with 95% forecast accuracy
  • AUTOMATION: Automate 75% of manual financial reporting processes reducing cycle time by 40%
  • INSIGHTS: Deliver 15 actionable financial insights monthly that directly impact business performance
SEAMLESS FINANCE

Create frictionless financial experiences across services

  • SYSTEMS: Complete phase 1 of finance systems integration across business units, consolidating 4 platforms
  • DASHBOARD: Deploy integrated financial performance dashboard with real-time KPIs for all business leaders
  • PROCESSES: Standardize top 10 financial processes across business units improving efficiency by 30%
  • COLLABORATION: Establish cross-functional finance teams supporting each business unit with shared KPIs
DIGITAL TRANSFORM

Lead healthcare finance into the digital future

  • MODERNIZATION: Complete technology modernization roadmap for finance systems with clear ROI metrics
  • AI: Implement 5 finance-focused AI solutions that deliver $15M in operational efficiencies
  • TALENT: Upskill 85% of finance team on digital finance capabilities through specialized training
  • INNOVATION: Launch finance innovation lab delivering 3 breakthrough solutions for cost management
COST LEADERSHIP

Set new standards for healthcare cost management

  • METHODOLOGY: Implement enhanced cost trend forecasting methodology reducing variance by 50%
  • INSIGHTS: Deliver monthly cost trend insights to business units with actionable recommendations
  • SCENARIOS: Create dynamic scenario planning capabilities for real-time decision support during volatility
  • BENCHMARKING: Establish industry-leading cost benchmarking framework by healthcare service category
METRICS
  • Adjusted EPS growth: 10% in 2024, 12% in 2025
  • Financial process efficiency: 30% improvement by Q4 2025
  • Finance cost as percentage of revenue: Reduce to 0.65% (15% improvement)
VALUES
  • Caring and giving back to our communities
  • Diversity, equity, and inclusion
  • Integrity and trust
  • Innovation and continuous improvement
  • Customer-centricity
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Align the learnings

Cigna Finance Retrospective

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To champion affordable, predictable healthcare while transforming the system for greater simplicity and stakeholder value

What Went Well

  • EVERNORTH: Evernorth Health Services showed strong revenue growth at 9% YoY
  • PHARMACY: Specialty pharmacy volume increased by 8% driving margin expansion
  • MEMBERSHIP: Cigna Healthcare grew total medical customers by 2.4% to 18.5M
  • EARNINGS: Adjusted EPS exceeded guidance at $6.79, up 6% from prior year
  • CAPITAL: Strong capital deployment with $1.8B in shareholder dividends/buybacks

Not So Well

  • MEDICARE: Medicare Advantage medical cost ratio increased by 240 basis points
  • UTILIZATION: Higher than expected utilization in certain service categories
  • EXCHANGES: ACA marketplace performance below expectations due to pricing
  • INTEGRATION: Integration costs for recent acquisitions exceeded projections
  • GUIDANCE: Forward guidance slightly below analyst consensus expectations

Learnings

  • FORECASTING: Need to improve medical cost trend forecasting methodology
  • DIGITAL: Digital engagement tools showing higher ROI than traditional methods
  • RISK: Value-based arrangements demonstrating better cost management outcomes
  • COORDINATION: Care coordination initiatives reducing readmission rates by 12%
  • PHARMACY: Integrated pharmacy-medical approach yielding 8% better outcomes

Action Items

  • ANALYTICS: Enhance predictive analytics capabilities for medical cost trends
  • AUTOMATION: Accelerate finance process automation to improve efficiency by 22%
  • INTEGRATION: Consolidate financial systems across business units by Q4 2025
  • REPORTING: Implement enhanced real-time financial performance dashboards
  • FORECASTING: Revise forecasting methodology to incorporate ML-driven insights
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To champion affordable, predictable healthcare while transforming the system for greater simplicity and stakeholder value

Strengths

  • DATA: Vast healthcare data assets across pharmacy, benefits and care services
  • ANALYTICS: Established analytics capabilities through Evernorth Intelligence
  • INVESTMENT: Strategic investments in health tech and digital solutions
  • TALENT: Growing data science and AI expertise across business units
  • SCALE: Large customer base providing data points for AI training and testing

Weaknesses

  • LEGACY: Older technology infrastructure requiring modernization for AI use
  • SILOS: Data fragmentation across business units limiting AI effectiveness
  • ADOPTION: Varying AI/ML maturity levels across different business segments
  • TALENT: Fierce competition for top AI talent in healthcare sector
  • GOVERNANCE: Complex regulatory environment for healthcare AI applications

Opportunities

  • PREDICTION: AI-powered clinical insights to improve care and reduce costs
  • AUTOMATION: Process automation reducing administrative costs by 15-20%
  • PERSONALIZATION: AI-driven personalized care pathways and interventions
  • FRAUD: Enhanced fraud detection and prevention using ML algorithms
  • ENGAGEMENT: Intelligent digital tools to improve customer experience

Threats

  • COMPETITION: Tech giants expanding AI healthcare capabilities rapidly
  • ETHICS: Ethical concerns about AI use in healthcare decision-making
  • REGULATION: Evolving regulatory landscape for AI in healthcare applications
  • SECURITY: Increased security vulnerabilities with expanded AI systems
  • TRANSPARENCY: Customer concerns about AI use in healthcare decisions

Key Priorities

  • INTEGRATION: Create unified data platform across business units for AI use
  • TALENT: Build specialized AI teams focused on healthcare applications
  • GOVERNANCE: Develop robust ethical AI framework for healthcare use cases
  • PRIORITIZATION: Focus AI investments on highest-impact clinical/financial areas